Seven things every tenant should know or do before signing a commercial lease

“Signing a lease, whether long or short term, need not be a daunting task,” says Leon Breytenbach, National Manager of the Rawson Property Group’s commercial division, “when a little effort beforehand will ensure a successful outcome.”

Take your time

Allow yourself the time to consider all aspects and implications of the lease. “By entering into a lease contract without fully examining it, you could overlook minor or possibly even major inclusions or omissions,” explains Breytenbach. Do not make your decision from a position of desperation; refuse to be hurried into a decision until you are satisfied that it is right for your business and that it contains all the necessary clauses.

Get the low-down on the landlord

“You will have frequent dealings with your landlord during the term of your lease, so it would be helpful to know a little more about them ” advises Breytenbach. Inasmuch as you will have to provide references to the landlord, it will pay you to contact the previous tenant to find out whether the landlord is fair and reasonable in his dealings with his tenants and whether he is willing to address any problems which may arise. Ask how the building is financed, whether the landlord’s portfolio includes other properties and if he has any partners, so as to determine the financial health of the entity to which you will pay rent. It would be counter-productive to find yourself in a situation where the landlord does not have the financial backing to properly manage the property or its financing obligations.

Meet the landlord

You will find it far easier to communicate with the landlord if you know him in person and not just as a voice on the phone or an e-mail . Maintain a polite, professional relationship with him at all times in order to create the best atmosphere for a successful rental negotiation. “Remember, the way you conduct yourself during a property visit or via telephone conversations with the landlord is important,  as it  will reflect on you as a tenant,” says Breytenbach. So rather be direct and honest in any negotiation with him, never employ strong-arm tactics or misrepresentation as this would create tension or distrust, even causing you to be rejected as a tenant. Mutual trust is a prerequisite when entering into a contract, so being open and discussing your queries will help to lay the foundations for a successful working relationship.

Know what is included

Some commercial properties include parking and utilities in the rental contract while others exclude them. “This can seriously impact on your budget,” warns Breytenbach, “thus causing an affordable property to become too pricey.” Ascertain which repairs or maintenance will be for your cost and what the landlord will cover. Confirm this with the landlord before signing the lease so as to be fully aware of how these financial costs will affect your budget.

Optimal location for your business

Your business will have certain specific locational requirements, for example, you may need increased foot traffic, a larger   parking area or greater visibility from the road. If your employees or clients depend on public transport then your premises will need to be located near accessible transport routes. . “You should also consider whether the premises will allow for growth when your business expands,” says Breytenbach, “as having to relocate to a larger premises within a short amount of time is an expensive and costly exercise.”

In-going inspection

“Once the landlord has offered you the option to rent the premises, be sure to document any pre-existing damage or deterioration before signing the lease,” says Breytenbach. This would include anything the landlord did not agree to repair after your initial inspection, such as stained or torn carpeting, broken blinds or damaged tiles. Stipulate any such damage in the lease agreement as pre-existing. It is advisable to take photographs of any pre-existing damage or deterioration at an in-going inspection, in case a dispute arises at the end of the lease.

Read every word

“Before committing your signature to the contract, be sure that your lease agreement includes all the points you have discussed with the landlord regarding any improvements that have been guaranteed,” advises Breytenbach, “as well as any pre-existing conditions or revisions to policies which may be set forth in the standard lease agreement,”. Ask for clarification on any terms  you may not fully understand or about which you feel uncomfortable. Discuss the contract thoroughly with the landlord to ensure that you have a complete  understanding of every part of the contract.

We trust these hints will assist you in securing a successful rental contract. Rawson Commercial currently has offices countrywide with trained agents willing assist you in your property search. Please contact (021) 658 7100 and we will refer you to your nearest office.

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